BY URSULA MILLER
The Cincinnati Enquirer
What's bad for Wall Street isn't necessarily translating into bad news for Main Street -- at least not yet.
That was the message William C. Dudley delivered to securities analysts Wednesday at the Omni Netherland downtown.
"Wall Street is suffering a lot of pain but I think Main Street is OK," Mr. Dudley, managing director of U.S. economic research at Goldman Sachs & Co., told about 50 members of the Cincinnati Society of Financial Analysts.
Low interest rates, tame inflation and scant unemployment have continued to keep the U.S. economy strong and consumers happy, even in the face of growing economic problems abroad, Mr. Dudley said.
Russia's economic and currency crisis ignited global concern in August, which led to a significant decline in stock prices, he said.
Mr. Dudley expects the U.S. economy to slow. But he remains more optimistic than the average economist, wagering that there is only a 30 percent chance of a recession.
Federal Reserve Chairman Alan Greenspan's monetary policy has provided a "platform for equities" and the economy, he said. Mr. Dudley expects two more cuts in interest rates by the Fed this year and more next year.
Mr. Dudley would change his relatively optimistic forecast if the international financial crisis deepens and spreads to Latin America, the stock market declines sharply or the dollar collapses because foreigners pull their $1 trillion in investments out of the U.S. financial markets.
"Then all bets are off," he said.
